Mortgage and refinance rates today, November 25, 2020

Peter Warden
The Mortgage Reports editor

Today’s mortgage and refinance rates 

Average mortgage rates edged lower yesterday, canceling out Monday’s similar rise. And conventional loans started out this morning at 3.063% (3.063% APR) for a 30-year, fixed-rate mortgage. 

I suspect mortgage rates will hold steady or inch lower today. Happy Thanksgiving for tomorrow! We have a date with a turkey then. But we’ll be back on Friday morning.

Find and lock a low rate (Jan 16th, 2021)

Current mortgage and refinance rates 

Program Mortgage Rate APR* Change
Conventional 30 year fixed
Conventional 30 year fixed 3.063% 3.063% Unchanged
Conventional 15 year fixed
Conventional 15 year fixed 3% 3% Unchanged
Conventional 5 year ARM
Conventional 5 year ARM 3% 2.743% Unchanged
30 year fixed FHA
30 year fixed FHA 2.938% 3.919% Unchanged
15 year fixed FHA
15 year fixed FHA 2.125% 3.065% Unchanged
5 year ARM FHA
5 year ARM FHA 2.5% 3.226% Unchanged
30 year fixed VA
30 year fixed VA 2.875% 3.053% Unchanged
15 year fixed VA
15 year fixed VA 2% 2.319% Unchanged
5 year ARM VA
5 year ARM VA 2.5% 2.406% Unchanged
Rates are provided by our partner network, and may not reflect the market. Your rate might be different. Click here for a personalized rate quote. See our rate assumptions here.
Find and lock a low rate (Jan 16th, 2021)

COVID-19 mortgage updates: Mortgage lenders are changing rates and rules due to COVID-19. To see the latest on how coronavirus could impact your home loan, click here.

Should you lock a mortgage rate today?

Even yesterday’s triple dose of good news (vaccine, transition and Yellen tapped for the Treasury) couldn’t boost mortgage rates for long. They started higher but moved lower during the day.

So I wouldn’t lock today unless I were near to closing. And that’s because I suspect yet lower rates are in prospect.

See “Are mortgage and refinance rates rising or falling?” (below) for more. Meanwhile, my personal rate lock recommendations are:

  • LOCK if closing in 7 days
  • LOCK if closing in 15 days
  • FLOAT if closing in 30 days
  • FLOAT if closing in 45 days
  • FLOAT if closing in 60 days

But with so much uncertainty at the moment, your instincts could easily turn out to be as good as mine — or better. So be guided by your gut and your personal tolerance for risk.

Market data affecting today’s mortgage rates 

Here’s the state of play this morning at about 9:50 a.m. (ET). The data, compared with about the same time last Friday morning, were:

  • The yield on 10-year Treasurys inched down to 0.86% from 0.87%. (Good for mortgage rates because it was falling after rises yesterday.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields, though less so recently
  • Major stock indexes were mixed on opening. (Neutral for mortgage rates.) When investors are buying shares they’re often selling bonds, which pushes prices of those down and increases yields and mortgage rates. The opposite happens when indexes are lower
  • Oil prices rose to $45.37 from $44.28 a barrel. (Bad for mortgage rates* because energy prices play a large role in creating inflation and also point to future economic activity.) 
  • Gold prices edged higher to $1,813 from $1,799 an ounce. (Neutral for mortgage rates*.) In general, it’s better for rates when gold rises, and worse when gold falls. Gold tends to rise when investors worry about the economy. And worried investors tend to push rates lower
  • CNN Business Fear & Greed index — Climbed to 90 from 84 out of 100. (Bad for mortgage rates.) “Greedy” investors push bond prices down (and interest rates up) as they leave the bond market and move into stocks, while “fearful” investors do the opposite. So lower readings are better than higher ones

*A change of less than $20 on gold prices or 40 cents on oil ones is a fraction of 1%. So we only count meaningful differences as good or bad for mortgage rates.

Caveats about markets and rates

Before the pandemic and the Federal Reserve’s interventions in the mortgage market, you could look at the above figures and make a pretty good guess about what would happen to mortgage rates that day. But that’s no longer the case. The Fed is now a huge player and some days can overwhelm investor sentiment.

So use markets only as a rough guide. They have to be exceptionally strong (rates are likely to rise) or weak (they could fall) to rely on them. But, with that caveat, they’re looking a little worse for mortgage rates today.

Find and lock a low rate (Jan 16th, 2021)

Important notes on today’s mortgage rates

Here are some things you need to know:

  1. The Fed’s ongoing interventions in the mortgage market (way over $1 trillion) should put continuing downward pressure on these rates. But it can’t work miracles all the time. So expect short-term rises as well as falls. And read “For once, the Fed DOES affect mortgage rates. Here’s why” if you want to understand this aspect of what’s happening
  2. Typically, mortgage rates go up when the economy’s doing well and down when it’s in trouble. But there are exceptions. Read How mortgage rates are determined and why you should care
  3. Only “top-tier” borrowers (with stellar credit scores, big down payments and very healthy finances) get the ultralow mortgage rates you’ll see advertised
  4. Lenders vary. Yours may or may not follow the crowd when it comes to daily rate movements — though they all usually follow the wider trend over time
  5. When rate changes are small, some lenders will adjust closing costs and leave their rate cards the same
  6. Refinance rates are typically close to those for purchases. But some types of refinances from Fannie Mae and Freddie Mac are currently appreciably higher following a regulatory change

So there’s a lot going on here. And nobody can claim to know with certainty what’s going to happen to mortgage rates in coming hours, days, weeks or months.

Are mortgage and refinance rates rising or falling?

Today

My best guess is that mortgage rates are likely to hold steady or inch lower today. But that’s based on my reading of the markets. And I got that wrong yesterday, though only a bit.

My mistake was in assuming that yesterday’s oversupply of good news would push them higher for longer. True, I said the good mood might last just “a matter of a day.” But it turned out to be an even shorter time.

Investors tend to be in a more somber mood when they trade in US Treasurys and mortgage-backed securities than when they’re buying stocks. And they may be less swayed by passing news events.

They know that, even if everything goes well, vaccines won’t deliver herd immunity until at least the second half of 2021. And they also know the American economy faces serious and sustained damage in the meantime, regardless of who’s president or in the new administration’s cabinet.

America has seen 2 million new COVID-19 cases in the last two weeks. And this morning’s disappointing weekly figures for new claims for unemployment insurance suggest the economic consequences can already be seen.

That’s grim news for all Americans — except those who want lower mortgage rates. Because those rates tend to fall the worse the economic conditions.

Recently

Over the last few months, the overall trend for mortgage rates has clearly been downward. A new all-time low was set during each of the weeks ending Oct. 15 and 22 and Nov. 5 and 19 according to Freddie Mac. Last Thursday’s record low was the 13th this year. And this morning Freddie said they held steady this week.

But note that Freddie’s figures relate to purchase mortgages alone and ignore refinances. And if you average out across both, rates have been consistently higher than the all-time low since a record set in August. The gap between the two has been widened by a controversial regulatory change.

Expert mortgage rate forecasts

Looking further ahead, Fannie Mae, Freddie Mac and the Mortgage Bankers Association (MBA) each has a team of economists dedicated to monitoring and forecasting what will happen to the economy, the housing sector and mortgage rates.

And here are their current rates forecasts for the last quarter of 2020 (Q4/20) and the first three of 2021 (Q1/21, Q2/21 and Q3/21).

But note that Fannie’s (released on Nov. 17) and the MBA’s (also Nov. 17) are updated monthly. However, Freddie’s are now published quarterly. And its latest was released on Oct. 14.

The numbers in the table below are for 30-year, fixed-rate mortgages:

ForecasterQ4/20Q1/21Q2/21Q3/21
Fannie Mae2.8%2.8%2.8%2.8%
Freddie Mac3.0%3.0%3.0%3.0%
MBA2.9%3.0%3.0%3.2%

So predictions vary considerably. You pays yer money …

Find your lowest rate today

Some lenders have been made nervous by the pandemic. And they’re restricting their offerings to just the most vanilla-flavored mortgages and refinances.

But others remain brave. And you can still probably find the cash-out refinance, investment mortgage or jumbo loan you want. You just have to shop around more widely.

But, of course, you should be comparison shopping widely, no matter what sort of mortgage you want. As federal regulator the Consumer Financial Protection Bureau says:

Shopping around for your mortgage has the potential to lead to real savings. It may not sound like much, but saving even a quarter of a point in interest on your mortgage saves you thousands of dollars over the life of your loan.

Verify your new rate (Jan 16th, 2021)

Mortgage rate methodology

The Mortgage Reports receives rates based on selected criteria from multiple lending partners each day. We arrive at an average rate and APR for each loan type to display in our chart. Because we average an array of rates, it gives you a better idea of what you might find in the marketplace. Furthermore, we average rates for the same loan types. For example, FHA fixed with FHA fixed. The end result is a good snapshot of daily rates and how they change over time.